The impact of COVID-19 pandemic has been such that every aspect of human life has been affected, and consumer spending is no exception. The daily lives of people across the globe have changed in ways that would have been unthinkable a few months ago.
There has been a downward shift in consumer spending patterns across the industries, as lockdown measures have restricted what we can spend money on. With people spending most of their time indoors, there has been a surge in demand for groceries, home entertainment, and e-commerce. Here we explore how some gained, and others lost during the outbreak of coronavirus.
Pandemic Has Brought About A Change In The Consumer Buying Behavior That Will Last Forever
There is no doubt, COVID-19 will have a lasting impact on society. It has affected people around the world, and for the first time in a long time- no one knows how the situation will unfold in the future, what will be the new normal? However, social psychology and some historical data offer a glimpse into how coronavirus could change consumers’ behaviors, attitudes, and spending habits.
How consumers are feeling right now is important to understand. Right now, more than anything else, everyone is worried about the health of their families. Then, with uncertainty about jobs and pay cuts, people are generally worried if they can buy basic needs. Most importantly, there is a general feeling of loss of freedom, which was once taken for granted.
But are these common concerns enough to bring about a change in consumer behavior? Yes, they are! While some have made major cuts in their spending, others are continuing to spend normally. However, they have made many changes in the way this life.
What Changes Can We Expect To See In Consumer Behavior And Demand?
With most of the countries lifting their lockdown measures, most of the shops and commercial places have opened up. However, due to the fear of contracting this disease, most of them have shifted to online options. People who were reluctant to shop online are also making a shift, and once they get used to the convenience of shopping online, it will be a sluggish come back to brick and mortar retailers.
So Who Gained And Who Lost?
Globally, consumers continue to spend- and in a few cases, they are spending more than the pre-pandemic levels on necessities like groceries and household supplies. For instance, during the lockdown, globally, the packaged food industry saw a rise of 377% as consumers stocked up on supplies.
However, the travel and transportation industry has seen an inevitable decline. Even though now air travel has opened up in many places, people are still traveling less. Similarly, the apparel industry is also experiencing a worrying slowdown. With consumers holding back on their spending, many clothing brands have been forced to scale back production, and are reimaging on how to position themselves going forward.
The demand for healthcare and hygiene products has seen an exemplary growth. Health organizations and governments across the globe are focused on increasing awareness regarding hygiene and safety. Products such as sanitizers and hand wash soaps have seen a huge surge in demand, and many companies have made a profitable shift to this category.
With global lockdown accelerating the trend of online shopping, e-commerce businesses are booming. There has been an increase of 18% from 2019 across the globe in e-commerce sales.
As people continue to work from home and socialize remotely, previously, niche tools such as Microsoft Teams and Zoom are suddenly supporting millions of corporate and personal interactions every minute. Even schools and colleges across the world are relying on these online platforms during these unprecedented times.
Buying Behavior Is Shifting Towards Purpose-Driven Brands
There is a shift in preference among consumers for purpose-driven brands. The consumer behavior pattern will largely depend now on how brands can shift their business priorities and use their resources to adapt and respond to these challenging times. Brands that are able to keep credibility and trust during the COVID-19 pandemic are likely to benefit in a big way.
According to experts, post-pandemic, there could be a rise of conscious consumption, and products/brands that could incorporate sustainability in their framework will become market-leaders.
The Bottom Line
COVID-19 has not impacted every industry equally, some have found this as an opportunity to flourish, and others are struggling to survive. By appealing to changing values of consumers to rebuild their brand experience has been profitable for some. However, for others, there is no other option but to wait and watch. Irrespective of the industry- the universal truth is that life after pandemic will look significantly different than what it was till last year.